TAZAMA Pipeline Conversion Process Nears Completion, Offers Hope for Cheaper Diesel Prices in Zambia

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The process of converting TAZAMA pipeline from a conduit conveying commingled feedstock for refinery to one carrying finished product (diesel) is at 90% of all works and it will be completed by Saturday next week (18th March 2023),” said Hon. Eng. Peter Chibwe Kapala, the Minister of Energy.

“All the crude oil (commingled feedstock), which was in the pipeline from the time Indeni Refinery was shut down by the PF government in April 2021 up to now, has since been removed, stored and is ready to be ‘refined’. This is about 78,000 tonnes or 80 million litres of fuel (petrol and diesel),” Hon. Kapala added.

The INDENI plant is expected to fire up and start processing the commingled feedstock by next Saturday, March 18th. “Once the commingled feedstock has been processed and sold, the funds raised will be used to pay for the costs incurred in cleaning and converting the pipeline, pay some of the debts owed by TAZAMA Pipeline Limited and for the operations and maintenance of facilities of TAZAMA Pipeline,” said Hon. Kapala.

Government, through the Treasury, already released K500m to INDENI for payment of redundancies for all workers and another K32 million for clearing of debts as well as for operations.

“The cleaned-up pipeline will be used to pump diesel from Dar es Salaam to Ndola using the older and smaller pipe while the newer bigger-gauge pipe will pump finished products to Mpika terminal for uptake by tankers. The New Dawn Government shall expand the storage facilities and also increase numbers of pumping and loading gantries at Mpika to allow for better and more efficient conveyance. All diesel to be offloaded at Ndola and Mpika shall be transported to parts of Zambia using Zambian tankers only. The operationalisation of TAZAMA Pipeline to carry finished products will reduce the pump price of diesel as transportation costs will be reduced,” Hon. Kapala said.

“Government is also working on reducing pump prices of both petrol and diesel by introducing bulk purchases of petroleum products, where Oil Marketing Companies (OMCs) pool resources together and order at a known price and one which the government would have negotiated. Currently, the procurement is liberal and disaggregated and this doesn’t help the consumer in many ways,” Hon. Kapala added.

MONTHLY REVIEW OF FUEL PUMP PRICES TO REMAIN IN PLACE

“Due to sensational media reports to the contrary, I wish to restate that the New Dawn Government has no plans to revert to previous ways of adjusting fuel prices after months, as that makes it hard to manage the debts owed to oil marketing companies and doesn’t make the pump price to be cost-reflective,” said Hon. Kapala.

“At no point in my recent media interviews has my office said that we are going back to the quarterly review system. As things start, we shall continue with monthly review to allow consumers to only pay for true costs. The completion of the cleaning of the TAZAMA pipeline – and the subsequent use of it to transport diesel at a cheaper transportation cost – doesn’t automatically mean we shall revert to the quarterly review. What we are saying is that, with the use of the pipeline, bulk purchases and bulk storage can allow for quarterly reviews because then as a country we can stock fuels for about three months and this allows us to tie the pump price to true costs. Even then, it will simply be a consideration. And if the numbers are right, we can revert to quarterly review. Until then there is no plan to move from monthly reviews. Monthly reviews

8 COMMENTS

  1. “All the crude oil (commingled feedstock), which was in the pipeline from the time Indeni Refinery was shut down by the PF government in April 2021 up to now, has since been removed, stored and is ready to be ‘refined’. This is about 78,000 tonnes or 80 million litres of fuel (petrol and diesel),” Hon. Kapala added.
    So if INDENI can still refine crude why are you converting to pumping finished products and how is fuel going to be cheaper when you are buying finished products instead of raw…this just goes all aganinst adding value into the economy.

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  2. “Once the commingled feedstock has been processed and sold, the funds raised will be used to pay for the costs incurred in cleaning and converting the pipeline, pay some of the debts owed by TAZAMA Pipeline Limited and for the operations and maintenance of facilities of TAZAMA Pipeline,” said Hon. Kapala.

    Please stop telling lies…so you are going to fire up INDENI just to refine comminled feed stock? Just firing it up itself will be a cost ..who is going to pay for that? Why dont you be transparent and tell the people how much this conversion of TAZAMA will cost exactly?

    LT there is no need to use Hon. Eng titles its only in Zambia where you see this stupidity.

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  3. Our friends are going electric and banning diesel meanwhile you are aiming to use more of it. If there is one thing you will learn from your gay funders abroad it should be about technological advancement. It seems hh only takes notes when they speak about gay stuff

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  4. @Tarino Orange
    Commingled feedstock is not crude oil but a mixture of finished diesel, petrol, Jet A 1 fuel and Paraffin.INDENI has never refined crude oil in decades.
    In fact it has erroneously been referred to a refinery over the years when it is essentially a separator of finished fuel products.
    That was gross misinformation by the MMD and PF

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  5. Which was shut down by the PF government….no statement ends without mentioning the PF. If this project fails it will because of the PF. When commissioning successful projects there’s no mention of the PF.

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